Minnesota Supreme Court ruling could be costly for snowbirds

Updated 10:09 am, Thursday, February 18, 2016

ST. PAUL, Minn. (AP) — A Minnesota Supreme Court ruling in a dispute over a transplanted Florida couple's residency could have tax implications for certain snowbirds and other part-time residents if they spend more than half the year in the state.

The court ruled Wednesday that Curtis and Stacy Marks surpassed the half-year limit for part-time residency because they spent 104 days in Minnesota in 2007 as nonresidents before establishing permanent residence in the state in August of that year. Curtis Marks' time in Minnesota added up to 257 days or 70 percent of that year. The decision holds them responsible for a full year's taxes, meaning they owe at least an additional $390,000.

The 4-3 ruling brought sharp definition to what the majority called an ambiguous law that determines when someone becomes a Minnesota resident, the Star Tribune reported (http://strib.mn/1Qod6ha ). As they read the law, it says full-time residency means 183 days, or half the year.

The Minnesota Department of Revenue declined to comment on how it will use the ruling in future residency tax cases.

But the couple's attorney, Barry Gersick, predicts that the case will have implications for Minnesota residents who live part time elsewhere.

"I feel bad for my clients," Gersick said. "I'm not sure how the Department of Revenue will use this ruling moving forward, but it will definitely have an impact beyond our narrow case."

The ruling reverses a state tax court decision in favor of the Markses in 2014. A judge ruled then that only the days the couple spent in Minnesota as nonresidents should be counted toward the 183 days for tax purposes. The revenue department argued that a person can claim residency elsewhere, but the clock starts ticking if they spend 183 days or more in the state in a given year and keep an abode in the state, as the Markses did.

The Markses own a nearly $4 million home on Lake Minnetonka in Woodland, according to court documents. The revenue department audited the couple in 2009, reviewing past tax returns.